Treasury: DeFi services vulnerable to AML/CFT, cybersecurity risks
By 
Aaron Nicodemus2023-04-07T16:14:00
A new U.S. Treasury report concluded that decentralized finance (DeFi) services are being used by bad actors to launder the proceeds of illegal activity, aided by crypto platforms weak or non-existent in anti-money laundering and sanctions compliance programs.
“The assessment finds that illicit actors, including ransomware cybercriminals, thieves, scammers, and [North Korea-based] cyber actors, are using DeFi services in the process of transferring and laundering their illicit proceeds,” said the report, issued Thursday.
Bad actors accomplish these illicit transfers by exploiting vulnerabilities in U.S. and foreign anti-money laundering/countering the financing of terrorism (AML/CFT) regulatory, supervisory, and enforcement regimes, as well as cybersecurity vulnerabilities that leave the platforms open to theft of digital assets, the report said.
Related articles
-
News BriefTreasury to review its compliance, enforcement efforts
The Treasury Department announced steps it is taking to improve its own compliance efforts, including a reassessment of the way it pursues enforcement actions.
-
News BriefTreasury teases revising AML/CFT regulations to address ‘de-risking’
The Treasury Department might propose new regulations for financial institutions aimed at discouraging banks from shutting out large swaths of potential banking customers because of risk concerns.
-
PremiumAsk a CCO: Accounting for regulator expectations in using new tech
Regulatory environments are ever evolving; four senior compliance practitioners detail what their respective businesses do to ensure compliance while utilizing new technologies.
More from Risk Management
-
News BriefAI hallucinations in Deloitte Australia report highlight important role for compliance
“Hallucinatory” citations and errors in an AI-assisted report produced by Deloitte for the Australian government should be a wake-up call for compliance officers about the risks of placing too much trust in AI.
-
ArticleHow food and beverage companies adjust to the throes of tariff woes
On-again-off-again tariffs, a down economy, and a long list of global supply chain disruptions are challenging U.S. food and beverage companies to adjust their supply chain operations in a variety of ways.
-
PremiumTop compliance challenges facing the food and beverage industry
New regulations, changing consumer demands, and global supply chain disruptions – from cost-of-goods inflation to tariffs to raw material shortages, and more – are just a few top challenges reshaping the operations of food and beverage industry today. “These challenges are no longer just logistical—they implicate sourcing risk, contract performance, ...